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LATEST NEWS UPDATES | Build a new economic imagination -Yamini Aiyar and Mekhala Krishnamurthy

Build a new economic imagination -Yamini Aiyar and Mekhala Krishnamurthy

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published Published on Jun 15, 2020   modified Modified on Jun 29, 2020

-Hindustan Times

Move beyond State-market, rural-urban, agri-non agri and welfare-growth binaries. They are linked

This has been a difficult three months for India. The policy response to the coronavirus disease (Covid-19) and the lockdown has forced it to confront long-ignored realities about the Indian economy — its fragility, regional and spatial concentration and deep structural inequity. It also made visible sources of precarious resilience. Agriculture and associated supply chains, for instance, held together despite significant disruption and fall in demand. Now, as India unlocks and the focus shifts to repair and reform, policy debates must contend with these realities. India cannot repair and reform without acknowledging its economic failures. Doing so places accepted pathways for growth, shaped by the 1991 moment, back in contention.

Coming off the stifling restrictions of the licence raj, the need to get the State out of the way was central to the 1991 imagination. Deregulation, market competition and opening up were the key mantras. This was a necessary element for economic reform. However, in its exuberance, the push for a smaller State failed to recognise that deregulation was not about State exit but about a changing role for the State and building a new economic regulatory architecture. This required more, not less, investment in State capacity — human resources and institutional systems, including processes for public accountability and dispute resolution. The pre-pandemic slowdown was, in part, a consequence of this failure to build regulatory capacity; our post-pandemic reforms run a similar risk.

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Hindustan Times, 15 June, 2020, https://www.hindustantimes.com/analysis/build-a-new-economic-imagination/story-1IK3X7qWEnlvY7YzF4nZSO.html


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